Russia has long wanted to be a major player in high tech and the country will now use the profits from oil and natural gas to get there.

The Russian Venture Company (RVC), created by that country's government, has set out to hand over $1.25 billion to top-tier venture capital firms. The venture firms have to invest the money--along with some of their own money--into Russian start-ups, or start-ups created by Russian expatriates that are based in Russia.

The terms, though, are generous. The RVC doesn't want stock in the companies that receive investments. Instead, it only wants its original money back plus 5 percent in interest, said Yan Ryazantsev, the investment director of the RVC, in an interview with CNET News.com.

Effectively, the money is being loaned at a low rate by the RVC; typically, investors in VC funds get significantly larger returns based on equity returns. If the start-up skyrockets, the VC firm and the company founders enjoy all the benefits of a zooming stock.

If the fund loses money, well, the RVC loses money. The RVC won't demand full payment of its money or the interest, Ryazantsev said. So far, the Duma, Russia's parliament, has given $625 million in funding, but will soon double that.

The catch to all of this, of course, is that we're talking about Russia. President Vladimir Putin has moved to centralize control over the country over the past several years. Various businessmen have been put in prison on controversial charges. Corruption and piracy are rampant, according to many analysts and reports.

"We need brains, talent and professional advice. This is what we expect the partners to contribute...Russia is the last frontier."

--Yuri Ammosov, Russian Ministry of Economic Development

"Hooo, boy. Just look at the papers," said one prominent venture capitalist, who doubted many top-tier firms would be interested. "But there are plenty of firms out there looking for funding."

So far, three firms--Draper, Fisher, Jurvetson; Asset Management; and Tamir Fishman--have entered into deals with the RVC. Under these deals, the VC firms create a new, separate fund with their own money and money from the RVC. By the end of next year, the RVC hopes to have alliances with seven to nine more funds.

Tech ambitions
The idea is to close a gaping hole in Russia's tech ambitions. Rising oil and gas prices have made Russia one of the fastest-growing economies in the world. The country also has a long history in chemistry, physics, aeronautics and mathematics. Ryazantsev himself is a scientist and a member of the Russian Academy of Natural Sciences.

However, the country is short on people with experience in taking interesting ideas in labs and turning them into multibillion dollar companies.

"We need brains, talent and professional advice. This is what we expect the partners to contribute," said Yuri Ammosov, a senior policy officer in the Russian Ministry of Economic Development and Trade. "Russia is the last frontier."

Investors who have tried to do business in Russia say the same thing, according to various people who have tried to invest there. One investor said it's tough to persuade scientists and professors to go commercial with their inventions.

"We still need to build that generation of leaders," said Evgeny Zaytsev, a partner at Asset Management working with the RVC in a new fund called Bioprocess Capital Partners. (Born in Russia, Zaytsev earned an MBA at Stanford University and has worked in the U.S. for some time.)

Ammosov, Ryanzantzev and others, though, contend the picture is changing. A large percentage of the Russian population is under 35, and typically start-ups are formed or incubated by the young. (Some VCs such as Sequoia Capital's Mike Moritz often assert that "youthful energy" is a key factor in success.) Successful Russia tech outfits include Yandex, a former Cisco reseller that has become a search site, and several outsourcing firms. Hewlett-Packard, Intel, and others have also expanded labs there in recent years.

Domestic Internet use and PC sales are growing rapidly as well. Five years ago, Ammosov said the so-called Israel model looked the most promising route for a Russian tech industry. In that mold, companies come up with products heavy on scientific intellectual property and export them.

I think I know a little about Russia, for example, I can speak Russian.

And I'll tell you, you have to be careful about prejudice and pre-conceived notions. They actually both work for and against Russia.

People think Russian hackers are the best in the world. In fact, I don't think the quality of computer talent is very good right now. Many of the so called hackers are simply script kiddies, and just a few really talented ones exist, and this is because of the lack of widespread access to computers in the same way that happened in other countries during the 90's.

On the other hand, some of the commentary about the tycoon criminals that got what was really coming to them for tax evasion and theft of public resources....that being made into an environment of suppressing business...is plain wrong.

That is not to say, that the business climate is great...it's not. But the reality is, the situation is improving, not getting worse. It's improving, but has a long way to go.

With all due respect, it seems like Russia is getting worse. Putin is consolidating power under his control and said when he is not President he will still retain power, all News media is under state control, prominent critics of Russia are poisened: Alexander Litvinenko, Viktor Yushchenko who survived it. And the Russian State Duma passed a law allowing Gazprom and Transneft to form their own private armies, which is completely insane.

Russia is on the backslide to the old Communist days. No big foreign company is going to make serious investments in Russia with the way the government is taking control of everything again. Why go into Russia when there is a chance they may decide to put your company assets in Russia under state control?

Yeah, our economy is tanking thanks to GW and his nutty oil war, which has actually raised the price of oil. Meanwhile, the Russian economy is starting to boom since they developed their Own oil instead of trying to steal if from other nations with a bogus war

"Toronto, Ontario - CGX Energy Inc. (OYL.U - TSX-V) is pleased to announce that it closed its previously announced private placement financing (the "Offering"). Pursuant to the Offering, CGX issued 17,500,000 common shares of the Corporation at a price of US$2 per share for gross proceeds of US$35M, which amount includes the $5M over-allotment fully-exercised by the underwriters. The Offering was underwritten by a syndicate of underwriters led by Cormark Securities Inc. and including Jennings Capital Inc., Fraser MacKenzie Limited, Toll Cross Securities Inc., Brant Securities

Inc., and Alexander Capital Group Inc. (collectively the "Underwriters"). As

compensation for their services in connection with the Offering, the Underwriters were paid an aggregate cash commission of US$2.1M.

The common shares issued pursuant to the Offering will be subject to a four-month hold period which expires on March 7, 2008. Completion of the Offering is subject to receipt by the Corporation of the final approval of the TSX Venture Exchange in connection therewith.

Kerry Sully, President &#38; CEO stated:

"We're pleased that the underwriters have closed this financing and exercised their option to subscribe for an additional 2.5 million shares. It will give us added flexibility to continue the exploration on our three offshore Guyana licenses and for general corporate purposes."

CGX is a Canadian-based oil and gas exploration company focused on exploration for oil in Guyana, South America. CGX is managed by a team of experienced oil and gas and finance professionals from Canada, U.S.A. and the UK. CGX is financed internationally and has thousands of shareholders worldwide.

Additional information on CGX Energy may also be examined and/or obtained through the internet by accessing CGX Energy's website at www.cgxenergy.com."

Really "have not built an aircraft like the "CONCORDE". "? What about Tu 144?<a class="jive-link-external" href="http://en.wikipedia.org/wiki/Tu_144" target="_newWindow">http://en.wikipedia.org/wiki/Tu_144</a>I wouldn't underestimate them.

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